Infosys has agreed to pay a record $34 million civil settlement based on allegations of systemic visa fraud and abuse of immigration processes. The company also has agreed to enhanced corporate compliance measures.

On October 21, 2013, U.S. Citizenship and Immigration Services (USCIS) clarified eligibility requirements for a 17-month extension of post-completion optional practical training (OPT) for F-1 students enrolled in STEM (science, technology, engineering, and mathematics) programs.

USCIS said the issue is whether F-1 students engaging in post-completion OPT under 8 CFR § 214.2(f)(10)(ii)(A) are eligible for the 17-month STEM extension under 8 CFR § 214.2(f)(10)(ii)(C) if they have not yet completed their thesis requirement or equivalent for their STEM degree when applying for the STEM extension. USCIS said that F-1 students engaging in post-completion OPT are eligible for a 17-month STEM extension even if they have not yet completed the thesis requirement or equivalent for their STEM degree.

USCIS explained that to be eligible for post-completion OPT under 8 CFR § 214.2(f)(10)(ii)(A), F-1 students must have completed their course of study, or, for students in a bachelor’s, master’s, or doctoral degree program, the students must have completed all course requirements for their degree, excluding any applicable thesis requirement or equivalent.

USCIS said that with a narrow reading of 8 CFR § 214.2(f)(10)(ii)(C)(1) and (2), one might conclude that F-1 students who have been granted post-completion OPT under 8 CFR § 214.2(f)(10)(ii)(A) must have completed all course requirements for their STEM degrees, including any applicable thesis requirement or equivalent, to be eligible for the 17-month STEM extension (i.e., only after “earning a STEM degree”). However, 8 CFR § 214.2(f)(10)(ii)(C)(1) and (2) cannot be read in isolation, USCIS said; they must be read in conjunction with 8 CFR § 214.2(f)(10)(ii)(A)(3), which states that students need not necessarily have completed their thesis requirement or equivalent to be eligible for post-completion OPT. Because the 17-month STEM extension is merely an extension of a previously granted period of post-completion OPT, USCIS concluded that students who are applying for the STEM extension need not necessarily have completed their STEM degree thesis requirement or equivalent to be eligible for the extension. Such a reading “is made even more compelling from a policy perspective, given the nation’s interest in attracting and retaining the world’s best and brightest individuals,” USCIS said. Moreover, USCIS noted, such a reading is consistent with the position taken by the Student and Exchange Visitor Program (SEVP) in policy guidance on this specific issue.

2. Infosys Settles Visa Fraud and Abuse Case for Record $34 Million

Infosys Limited, an Indian company involved in consulting, technology and outsourcing, has agreed to pay a record $34 million civil settlement based on allegations of systemic visa fraud and abuse of immigration processes, and also agreed to enhanced corporate compliance measures. The $34 million payment made by Infosys as a result of these allegations represents the largest payment ever levied in an immigration case, U.S. Immigration and Customs Enforcement (ICE) announced.

ICE noted that Infosys is located in 30 countries and in 17 U.S. cities, including a location in Plano, Texas. The Plano location is responsible for handling the immigration practices and procedures for U.S. operations of Infosys. Infosys brings foreign nationals into the United States to perform work and fulfill contracts with its customers under two visa classification programs relevant to this case: H-1B and B-1.

ICE said that, among other things, Infosys fraudulently used B-1 visa holders to perform jobs involving skilled labor that were instead required to be performed by U.S. citizens or legitimate H-1B visa holders. ICE accused Infosys of directing B-1 visa holders to deceive U.S. consular officials, including a “do’s and don’ts” memorandum that instructed B-1 foreign nationals not to mention activities that “sound like work” or anything about contract rates. ICE also noted that Infosys failed to maintain I-9 records for many of its foreign nationals in the United States in 2010 and 2011, including failing to update and re-verify the employment authorization status of a large number of its foreign employees.

In addition to the $34 million payment, the settlement requires Infosys to conduct additional auditing for I-9 forms and meet a reporting requirement for B-1 usage, among other things.

David M. Marwell, special agent in charge of Homeland Security Investigations in Dallas, said: “This settlement against Infosys is the largest immigration fine on record. The investigation indicated that Infosys manipulated the visa process and circumvented the requirements, limitations, and governmental oversight of the visa programs. The investigation also showed that more than 80 percent of Infosys’s I-9 forms for 2010 and 2011 contained substantive violations. Ultimately, these actions by Infosys cost American jobs and simultaneously financially hurt companies that sought to follow the laws of this nation. Companies that misuse the visa process can expect to be scrutinized and held accountable.”

3. Visa Office Forecasts Changes in Some Employment Cut-Off Dates

The Department of State’s Visa Office has projected changes in some employment cut-off dates. The December 2013 Visa Bulletin notes that the India employment second and third preference category cut-off dates advanced very rapidly at the end of fiscal year 2013. Those movements were based on the availability of thousands of “otherwise unused” numbers that could be made available without regard to the preference per-country annual limits. This has resulted in a dramatic increase in applicant demand, the Visa Bulletin notes. Consequently, the Visa Office has retrogressed those cut-off dates for December “in an effort to hold number use within the numerical limits.”

In the coming months, the Visa Office expects the employment first preference category to remain Current, and the employment second preference worldwide category to remain Current. The employment second preference category for China is expected to move forward three to five weeks. No forward movement is expected in the India second preference category.

The worldwide employment third preference category cut-off date has advanced extremely rapidly during the past seven months “to generate new demand,” the Visa Bulletin states. As the rate of applicants whose cases are finalized increases, it could have a significant effect on the cut-off date. Rapid forward movement of this cut-off date “should not be expected to continue beyond February,” the Visa Bulletin notes.

China’s and Mexico’s employment third preference cut-off dates are expected to remain at the worldwide date. India should see no forward movement and the Philippines is expected to move forward three to six weeks.

The employment fourth and fifth preference cut-off dates are expected to remain Current. The Visa Office noted that these projections are “what is likely to happen during each of the next few months based on current applicant demand patterns.” However, the Visa Office cautioned that these trends are not guaranteed and corrective action could be required at some point to maintain number use within the applicable annual limits. Unless indicated, the Visa Office said that those categories with a Current projection in the December Visa Bulletin “will remain so for the foreseeable future.”

4. State Dept. Updates Visa Reciprocity Tables

The Department of State has updated the visa reciprocity tables. Among other things, the Department recently updated the document section for Somalia; updated police records information for Croatia; and added same-sex marriage certificate information for South Africa and Spain.

In U.S. v. Red Bowl of Cary, LLC, the Executive Office for Immigration Review’s (EOIR) Office of the Chief Administrative Hearing Officer (OCAHO) reduced fines for Red Bowl of Cary, doing business as Red Bowl Asian Bistro in North Carolina, for Form I-9 violations. OCAHO also reduced fines for a small family business in a similar case, U.S. v. Kobe Sapporo Japanese, Inc. EOIR also recently updated its fact sheet on OCAHO.

Red Bowl case. U.S. Immigration and Customs Enforcement (ICE) investigated Red Bowl, which had 23 active employees, in 2011. The restaurant manager advised ICE that its I-9 employment authorization forms were filled out after ICE issued its Notice of Inspection and that he and Red Bowl’s president were unaware of the requirement to use the form. ICE sought penalties totaling $21,505. Red Bowl argued that the penalty was both inappropriate and excessive.

OCAHO noted that the minimum penalty for paperwork violations is $110 and the maximum is $1,100. In assessing an appropriate penalty, OCAHO noted, the following factors are considered: (1) the size of the employer’s business, (2) the good faith of the employer, (3) the seriousness of the violations, (4) whether the individual was an unauthorized alien, and (5) the history of previous violations. OCAHO observed that the law neither requires that equal weight be given to each factor nor rules out consideration of additional factors.

Potential penalties for the 23 violations in this case ranged from $23,509 to $25,300, OCAHO noted. Instead of focusing on the completion of its I-9 forms, Red Bowl noted that it exercised reasonable care to refrain from hiring unauthorized aliens and had never done so. Red Bowl said that its conduct may have been negligent but that its violations were less serious than, for example, an intentional falsification of forms or a refusal to fill them out. Red Bowl argued that the fines were unduly punitive in light of a statutory analysis showing no aggravating factors. The restaurant noted that even in a worst-case scenario, where a large company willfully disregarded its obligations, falsified I-9 forms, employed unauthorized workers, and had a history of previous violations, the penalty would still be only $3,794.45 more than what the government sought here. Red Bowl also noted that the proposed penalty represented 16% of its income for the tax year 2011 and would create undue hardship. Red Bowl argued that a more appropriate penalty would be $110 for each violation, or a total of $2,530. The restaurant also requested a schedule permitting payment over a six-month period.

OCAHO noted that Red Bowl had not employed any unauthorized aliens and had no history of previous violations, so the only negative factor was the seriousness of the violations. OCAHO said that an employer’s failure to prepare a timely I-9 form for an employee is a serious violation because it may permit an unauthorized individual to maintain unlawful employment. OCAHO acknowledged that 16% of the restaurant’s income appeared excessive in light of the record, noting that a penalty “needs to be sufficiently meaningful to accomplish the purpose of deterring future violations” but “should not be unduly punitive in light of the respondent’s resources.” OCAHO said that penalties very close to the maximum permissible “should be reserved for the most egregious violations,” noting a “general public policy of leniency toward small entities.” OCAHO adjusted the penalty amount to “an amount closer to the midrange,” for a total penalty of $10,350. OCAHO said that a payment schedule could be established “to minimize the impact of the penalty on the operations of the restaurant.”

Kobe Sapporo Japanese case. In a similar case, U.S. v. Kobe Sapporo Japanese, Inc., ICE alleged that the company, a small family-owned restaurant in North Carolina, failed to ensure that its 26 workers properly completed various sections of the I-9 form. The complaint sought penalties totaling $29,452.50. OCAHO noted that an employer’s financial health, the economy, the employer’s ability to pay the fine, and the potential effect of the fine on the company are all appropriate additional factors to be considered. Penalties are not intended to cause employees to lose their jobs or to force employers out of business, but rather to enhance the probability of future compliance, OCAHO said, reducing the total amount of the penalties to $15,400.

Fact sheet updated. EOIR also updated its OCAHO fact sheet on October 1, 2013. The fact sheet explains what OCAHO does; the types of cases it hears; and how it receives cases related to employer sanctions, document fraud, and unfair immigration-related employment practices, including the typical steps in how a case proceeds. The fact sheet notes that OCAHO decisions are available at http://www.justice.gov/eoir/OcahoMain/ocahosibpage.htm.

6. Government Agency Links

Follow these links to access current processing times of the USCIS Service Centers and the Department of Labor, or the Department of State’s latest Visa Bulletin with the most recent cut-off dates for visa numbers:

7. Klasko News

News and Noteworthy

Michelle T. Kobler volunteered in the Refugee Thanksgiving event on November 23, hosted by HIAS (Hebrew Immigrant Aid Society) Pennsylvania. Approximately 200 recently arrived immigrant refugees attended the event, including people from Sudan, Nepal, and Burma, and were served a variety of donated food dishes ranging from traditional Thanksgiving fare to international culinary samplings.

Recent Speaking Engagements

On November 18, 2013, Matthew T. Galati (Matt) spoke at The Pennsylvania State University in State College where he discussed “The Entrepreneurial International Student: Opportunities and Pitfalls.” Entrepreneurial international students face hurdles beyond those of their classmates if they wish to start a business. Matt presented on the scope of restrictions on international students’ ability to start a business, and outlined the visa options for international business founders in US immigration law.

Matt served as a panelist on “Students and Scholars Gone Wild,” a session at the NAFSA Region VIII Conference, in Pittsburgh on Friday, November 15. Matt and a panel of DSOs presented on remedies to common circumstances where F-1 and J-1 students commit acts which complicate their maintenance of status, such as student discipline (e.g. academic probation and suspension), “missing” students, engagement in unauthorized employment, domestic relations issues, and criminal violations. For more information on this session, write to Matt at mgalati@klaskolaw.com.

Elise A. Fialkowski chaired a panel presentation titled “Guess Who is Coming to Campus – Government Site Visits, Audits and Inspections” at the NAFSA Region VIII conference in Pittsburgh, PA on November 14, 2013. More than ever, universities have been facing government site visits, audits, and inspections of their student/scholar programs and employment records. The panel covered these developments including: Form I-9 audits and inspections, H-1B site visits, DOL and OSC audits, FERPA Compliance, Practical advice to deal with increased scrutiny and develop an institutional response policy. For information on the subject matter, e-mail Elise at efialkowski@klaskoalaw.com or visit our Worksite Compliance Resource Center.

On November 14, William A. Stock (Bill) spoke to students at Stevens Institute of Technology about non-immigrant status, H-1B requirements and alternatives, and permanent residency. Bill also conducted a compliance training session with faculty and staff. To review the student session PowerPoint, click here.

Bill was at Drexel University on November 13 and spoke with international students about their options after graduation and beyond OPT, and addressed questions about H1-B, permanent residency, and much more.

H. Ronald Klasko (Ron) was at the Harvard Business School on Tuesday, November 12 where he discussed with MBAs H-1B issues for start-up businesses, intracompany transferee (L-1) visas, extraordinary ability (O-1) visas, investment (EB-5) and other issues of interest to entrepreneurial business students.

On November 11, Ron spoke at Yale University on “Green Card Options for Researchers” and “Post-Graduation Employment Options for F and J Students.” For more on these talks, contact Ron at rklasko@klaskolaw.com.

Bill visited Duke University’s Faqua School of Business on Friday, November 8 where he spoke with international students on quota-exempt employment, strategies to enhance chances of getting H-1B, travel and status issues for H-1B approvals, H-1B issues for start-up business, among other related topics. For more information, visit the event page on our website.

Recent Publications

“Navigating Specialty Occupation Visa Option (and Others)” authored by Michelle T. Kobler, was published in the October 16, 2013 edition of The Legal Intelligencer. In the article, Michelle discusses the H-1B specialty occupation visa cap and its trends, limits, and exemptions. Michelle also outlines this year’s H-1B lottery system, while exploring options for those that may have missed the H-1B application deadline. For a copy of this article, contact Michelle at mkobler@klaskolaw.com.